Nonprofit Approaches Solve The Rural Broadband Problem

President Barack Obama said in his State of the Union address that he wants to upgrade the nation's "critical infrastructure," including our "incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world."

The Green Bay Packers know how to tackle this problem.

Green Bay, Wis., population 104,000, and its National Football League franchise have much in common with communities left behind in today's broadband world. In 1923, the Packers faced a similar crisis. How to keep the team in Green Bay despite being in an "uncompetitive" market.

Green Bay took a page out of the playbook of rural electrification. It converted the franchise into a community-owned nonprofit. The move permanently tied the Packers to Green Bay and lifted the burden of generating profits for outside investors. In short, Green Bay found a business model in scale with its market.

Rural electrification via a community-ownership business model began more than 100 years ago when for-profit utilities bypassed rural areas. This self-help solution has deep roots in rural America, where nonprofit cooperatives have long provided essential services for local economies.

Yet the congressionally mandated National Broadband Plan omits nonprofit networks as part of a universal broadband strategy. Blair Levin, a former FCC official and Raleigh attorney, is the Plan's lead author. According to Thomas Friedman in a Jan. 3 column in The New York Times, Levin now believes that "America is focused too much on getting 'average' bandwidth to the last 5 percent of the country in rural areas, rather than getting 'ultra-high-speed' bandwidth to the top 5 percent in university towns, who will invent the future."

Levin leads Gig.U, a consortium of major research universities - including UNC-Chapel Hill, Duke and N.C. State - promoting "ultra-high-speed" Internet access. He has every right to advocate for Gig.U, but doing so at the expense of under-served rural communities raises concerns about his work with the National Broadband Plan.

Universal access to electricity was made possible by the 1936 Rural Electrification Act, later amended to help launch rural telephone cooperatives. Today, more than 1,400 electric and telephone cooperatives ensure universal access to electric power and telephone services in rural America. The vast majority of these networks are private nonprofits.

But the Broadband Plan rewrites this history, attributing rural electrification not to cooperatives, but to municipal governments. This revisionist history is likely due to the lobbying clout of incumbent cable and telephone companies, who would have us believe that only two rural broadband options exist: "government-owned" networks or private, for-profit carriers.

Meanwhile, the incumbent carriers have passed anti-municipal broadband laws in more than 20 states, including North Carolina. Indeed, the only community-based, self-help option mentioned in the Plan is municipal ownership, a straw man which the Plan immediately knocks down with this caveat straight out of a telecom lobbyist's policy brief: "Municipal broadband has risks. Municipally financed service may discourage investment by private companies. Before embarking on any type of broadband buildout . . . towns and cities should try to attract private-sector broadband investment" (NBP, Chapter 8.19).

Of course, anyone who has experienced life-without-broadband in rural America knows that the problem is not in "towns and cities"; it's in sparsely populated unincorporated areas where municipal broadband is not an option.

This blind-spot also appears in the Plan's call for a new Connect America Fund to disperse more than $15 billion in rural broadband subsidies over the next decade. These monies come from the $1-$2 monthly Universal Service fee paid by all telephone subscribers.

However, this CAF subsidy is only available to incumbent carriers. Existing, or planned, community-owned networks are not eligible for CAF support. Why does the Plan rely solely on incumbent carriers that have long argued that their for-profit business model doesn't work in sparsely populated rural areas?

No one would confuse the Green Bay Packers with a government-owned enterprise. Rural cooperatives and community-owned entities like the Packers belong to the private sector; they are not, as the telecom lobbyists would have us believe, "government-owned." Rural cooperatives have succeeded because, like the Packers, their nonprofit business model is in scale with the communities they serve.

The State of the Union theme was "An America Built To Last." Rural networks are "built to last" because they are owned and maintained by the people they serve. Absentee-owned networks, by contrast, may be minimally maintained and the last to be upgraded. It's a history that telecom lobbyists would have us forget.

Wally Bowen is founder and executive director of the Mountain Area Information Network (MAIN), a nonprofit broadband network in Asheville.

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No one disputes the importance of broadband access for economic growth and job creation. That's why five cities - Wilson, Salisbury, Morganton, Davidson and Mooresville - invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives.